Canada's Deputy Prime Minister and Finance Minister Chrystia Freeland delivered the Liberal government's fall fiscal update in the House of Commons on Monday (Nov. 30), announcing a loan program for Canada’s travel and tourism sector.
Calling tourism, hospitality, travel, arts and culture “particularly hard-hit,’ the newly-unveiled Highly Affected Sectors Credit Availability Program will offer loans of up to $1 million at favourable rates to eligible businesses with a 10-year term.
Monday’s economic statement also proposed $206 million over two years to "support regional air transportation, including regional air carriers" by giving the funds to "Regional Development Agencies" to create a new "Regional Air Transportation Initiative."
All supports and initiatives combined (tourism and non-tourism related), the federal government estimates it will run a historic $381.6-billion deficit this fiscal year in response to the COVID-19 pandemic.
"Disappointing at best”
But noticeably absent from Freeland’s speech were updates on sector-specific support for Canada’s major airlines (ie: news of a bailout plan), the extension of some aid benefits, and if whether or not travel agent commissions will be protected if airlines are forced to refund customers.
“The Fall Economic statement was disappointing at best,” advisor Brenda Slater, co-founder of the Association of Canadian Independent Travel Advisors (ACITA), wrote PAX in a statement, speaking on behalf of the association. “ACITA expected much more detailed information surrounding the Canada Recovery Benefit (CRB) extensions beyond the 26 weeks, and the urgent need to protect agent/agency commissions in any airline bailouts.”
ACITA is a grassroots advocacy group that formed in June to educate and lobby politicians about the challenges self-employed travel agents are facing amid the pandemic.
The group rallies independent travel advisors on a private Facebook group, which now boasts more than 1,500 professionals, urging members to schedule a one-on-one Zoom meeting with their local MP so they can personally explain why they need help.
Fair access to financial aid, the impact of commission recalls, rapid testing at airports and easing Canada’s 14-day quarantine order are just some of the topics addressed at each 30-minute meeting.
Since the summer, the group has successfully met with more than 100 MPs and policy makers, gaining support from politicians and, in turn, giving travel advisors a voice in Ottawa.
The group says they’re now being asked to attend caucus meetings as “more doors are being opened,” Slater said, speaking on the group’s progress.
“Our fabulous advisor community has been instrumental in helping make this happen [and] we hope that more will join us,” said Slater.
In regards to Monday’s fiscal update, Slater said ACITA was pleased to see Ottawa extend the Canada Emergency Business Account (CEBA) loan (which provides interest-free loans of up to $40,000 to small businesses and not-for-profits), restore the Emergency Wage Subsidy (CEWS) to 75 per cent, and extend support offered through the Canada Emergency Rent Subsidy (CERS).
However: “Unfortunately, the majority of independent advisors are not able to take advantage,” Slater wrote.
“Canada remains a global outlier”
The National Airlines Council of Canada (NACC), which represents the country's largest carriers, including Air Canada, WestJet and Air Transat, also issued a statement in response to the government’s plans.
NACC President and CEO Mike McNaney said that while countries around the world moved forward months ago to support their airlines, “Canada remains a global outlier and is ostensibly stuck at Stage Zero on the government planning process.”
“This lack of action does not reflect the economic importance of the sector to Canada's overall recovery, nor the need to ensure Canada's largest carriers can continue to compete internationally,” said McNaney.
Ottawa’s fiscal update says airlines have, so far, received more than $1.4 billion through the wage subsidy program.
While Minister Freeland did not share any details about a possible bailout package for airlines on Monday, she told CBC's Chief Political Correspondent Rosemary Barton that talks with Canada's aviation sector are still underway.
"In order to know exactly how to support them, we need to really see what their financial position is," Freeland told Barton.
Agents in a precarious situation
Still, the issue of sector-support for airlines being contingent on Canadians being refunded for cancelled flights due to COVID-19 continues to boil over, especially among travel agents as mass refunds would, in turn, claw back thousands in hard-earned commissions.
It’s a frustrating, helpless and angering position to be in as many agents have already used their income to pay for groceries, mortgages and business-related expenses.
In some cases, agents (many of which who want refunds for their customers) are paying back income they earned as far back as 2019.
Some have had no choice but to foot the bill using government-issued aid.
In other words, travel agents are using federal money to pay back the same companies that are in line to receive a federal bailout.
Lobby groups like ACITA and the Association of Canadian Travel Agencies (ACTA) have been calling on Ottawa to include the trade in any possible bailout package for airlines so commissions are protected.
Meanwhile, there’s an equal amount of rage building up on the consumer side of things as more than 100,000 Canadians have signed petitions calling on the feds to intervene and demand that airlines refund customers for cancelled travel.
Several class-action lawsuits have been filed against Canada’s top carriers, which continue to face unprecedented losses due to sinking demand.
Thousands of jobs at stake
McNaney said Canada has lost 85 per cent of air connectivity due to the pandemic with flights being reduced or eliminated in every region of the country.
“While we note the government has affixed a $206 million budget to its support for regional air transportation, the government has yet to provide details of the new Regional Air Transportation Initiative and how such an initiative will, in practice, support the continued existence of regional air services,” said McNaney.
McNaney called on Ottawa to implement an “effective testing regime at airports” to support a safe, science-based restart of the travel sector while easing border and travel restrictions.
“Governments around the world have provided their domestic aviation sectors approximately US$173 Billion in support, precisely because a healthy aviation industry is critical to overall economic recovery,” said McNaney. “We have also seen countries such as the United Kingdom embracing a science-based approach to testing and reducing quarantine measures.”
McNaney added that it's "time for the federal government to follow the global approach and move urgently to finalize Canada's path to supporting financial assistance for airlines, and in turn ensure aviation can support Canada's overall recovery.”
“Hundreds of thousands of jobs in communities large and small across the country, will be impacted by how the government proceeds," he said.
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